Dat`s Entertainment-or That`s What The Audio Industry Hopes

Will digital audio tape players be the miracle product that brings life back to the consumer electronics industry?

It has been several years since the industry had a hot product drawing hordes of new consumers into electronics stores.

Now that the long-anticipated DAT players have finally reached American shores from Japan, where they were developed, they must overcome several obstacles to gain widespread consumer acceptance, audio experts say.

``Until we get somewhat lower prices and a better selection of prerecorded software, I don`t think this is the panacea that the audio industry is looking for,`` said Leonard Feldman, a senior editor for Audio magazine.

Software, in industry jargon, refers to records, tapes and discs.

The DAT machines, the key piece of hardware in the equation, are selling for about $800 to $1,700.

Moreover, DAT is arriving not that long after many consumers switched from records to cassettes and compact discs, and no one knows just how many people are willing to undergo the expense and effort of switching again.

Making matters even murkier is the prospect of a rival digital tape format.

That possibility emerged in October when Philips N.V., the Dutch electronics giant, announced it was working on a different type of digital tape machine that could accommodate existing, non-digital tape cassettes.

The current crop of DAT machines can only use smaller tapes.

Digital audo tape players employ the same basic technology as compact disc players to achieve the same high-fidelity results. Both store sound the way computers store information-as a sequence of numbers.

This produces a recording with far less distortion than sound reproduced by standard analog cassettes and records, which store sound in a wavelike form.

What sets DAT apart from CDs is that users can buy blank tapes and make their own recordings; CDs come only in a prerecorded form.

Digital audo tape players have been available in Japan for nearly 3 years, but a dispute with American record producers, concerned that digital taping would lead to widespread copyright infringement, delayed their introduction here until last summer.

To appease the recording industry, the Japanese manufacturers agreed to install a digital ``copy lock,`` which prevents using a digital tape as a source of additional copies.

The system is designed to curb widespread piracy, which relies on making copies of copies.

Some retailers were concerned the delay might hurt the product.

``It has been so long since the hoopla surrounding the first announcement of the technology, we were fairly concerned that the steam may have come out of it,`` said Art Shulman, executive vice president of Harvey Electronics, a retailer with five stores in the New York area.

But Shulman said consumer interest has been strong, and the store has sold several hundred machines at $999 each. ``I think it is a real product,`` he said.

For electronics manufacturers, the level of household penetration is a key measure of a product`s success.

No one expects DAT players to match the impressive numbers achieved by video cassette recorders, which are in 69 percent of American homes, according to the Electronic Industries Association, a trade group based in Washington.

But to do well, some analysts say, DAT players will have to at least equal the performance of CD machines, which are in slightly more than 20 percent of homes.

Compact disc players introduced American consumers to the benefits of digital audio technology in 1983. About 35,000 CD players were sold that year in the United States.

By comparison, 80,000 to 100,000 DAT players will be sold in this country in the next 12 months, according to Martin J. Homlish, president of Sony Corp. of America`s audio-component-systems unit.

Sony and other Japanese companies, including Denon, Technics and JVC, dominate the DAT business.

American consumers have actually benefited from the long delay in DAT`s arrival from Japan, some in the industry say.

The current players are, in effect, third-generation products, says Homlish. ``We have been able to develop some efficiencies of scale on production,`` he said.

As a result, as expensive as the new machines are, they are priced $300 to $400 below what they were expected to cost as little as a year ago.

One Sony model is selling in some New York City stores for as little as $799, while most DAT players retail for around $1,000.

But audio experts said prices must drop a lot more before DAT players have the potential to become a true mass-market product.

In consumer electronics retailing, ``the $500 point is the magic number,`` said Feldman of Audio magazine.

Sales of VCRs and cellular phones both increased once their prices fell to the $500 level, he said.

Feldman and others believe DAT prices will reach that level before too long as sales volume grows, competition increases and the manufacturing process is refined.